Energy Savings Performance Contracts

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Energy Savings Performance Contracts

Southeast Sustainability Summit

August 21, 2013

Julia Kelley

Group Leader

Residential, Commercial and Industrial Energy Efficiency


What we’ll cover

• What is an Energy Savings Performance Contract (ESPC)

• Who Uses ESPCs?

• Explanation of DOE and ORNL involvement in ESPCs

• ESPCs in the Southeast – News and Examples

• How do energy efficient technology vendors engage?


What we’ll cover


• Who Uses ESPCs?




• How can the public sector encourage ESPCs in your state or city?


What is an ESPC?

An Energy Savings Performance Contract (ESPC)

allows Federal agencies to procure facility energy

improvements:

• with no up-front capital cost and,

• without special appropriations from Congress


ESCO and Agency Roles

• An Energy Services Company (ESCO)– designs and constructs the energy project– obtains financing to cover costs– guarantees cost savings to cover payments

over contract term

• The Agency:– Negotiates and awards task order– Pays for the project over time from

savings generated from improvement


The Difference Between Federal ESPCs and Conventional Design/Build Process

• Financing - maximum contract terms – 25 years

• Cost savings guaranteed to exceed payments

• Performance of installed energy conservation measures (ECMs) is guaranteed

• ESCO is often responsible for O&M

• Measurement and verification of savings is required


ESPC Payments

• Key: ESPCs are budget neutral

• ESPCs are paid from savings – guaranteed

$

Energy+ O&M Cost

Savings

Before ESPCContract

During ESPCContract

After ESPC Contract

Utility Bill+ Energy Related O&M


ESPCs: Why the interest?





Payments to ESCO

Payments to ESCO

SavingsSavings

Excess SavingsExcess Savings


Energy Conservation Measures (ECMs)In all Technology Categories• Boiler and chiller plants

• Energy management control systems

• Building envelope

• HVAC

• Chilled/hot water and steam distribution

• Lighting

• Electric motors and drives

• Refrigeration

• Distributed generation


Energy Conservation Measures (ECMs) in All Technology Categories• Renewable energy

• Energy/utility distribution

• Water and sewer

• Electrical peak shaving/load shifting

• Rate adjustments

• Energy-related process improvements

• Commissioning

• Advanced metering

• Appliance/plug load reductions


What we’ll cover


• Who Uses ESPCs?





Who uses ESPCs?

• Public sector including:– Federal government– School districts– Municipalities– State government– Universities

• Available to private sector but . . . . – Not as popular in the private sector– Want a faster payback– Some high profile private ESPCs – including Empire

State Building


What we’ll cover


• Who Uses ESPCs?





DOE’s Federal Energy Management Program

Mission

– FEMP works with key individuals to accomplish energy change within organizations by bringing expertise from all levels of project and policy implementation to enable Federal Agencies to meet energy-related goals and to provide energy leadership to the country.


FEMP Support of ESPCs in federal sector

• Developed and Manages IDIQ Contract with ESCOS for ESPCS for all federal agencies to use

• Assigns project facilitators to ESPC projects

• Offers Renewable Energy and Advanced Technologies Planning and assistance to federal sites

• Provides ESPC training


What we’ll cover


• Who Uses ESPCs?





North Carolina – ESPC project example

• Appalachian State University – campus-wide renovation for campus in Boone just announced in July

• $16.5 million project

• Includes:– Heating and air-conditioning upgrades– Lighting upgrades– Water conservation upgrades

• Will employ up to 266 workers over a 22-month construction period

• 13 year pay-back for project


SE Energy Savings Performance Contracting Dollars per capita• Source: Energy Services Coalition

• Estimated amount of ESPC investments in state and local buildings as reported

Boxes: Total Investment in Performance Contracting in Millions


ESPC by State – Enabling Legislation

• Visit:– http://web.ornl.gov/info/esco/legislation/newesco.shtml

• Includes clickable map with– State energy program web sites– Citations and links to state enabling legislation for

performance contracting– Information on public sector applicable areas

• School districts

• Municipalities

• State colleges and universities counties

• State

• Any public agency

• Let us know if your state info needs updating

http://web.ornl.gov/info/esco/legislation/newesco.shtml





What we’ll cover


• Who Uses ESPCs?





How do energy efficient technology vendors engage?• It’s the ESCO that purchases the equipment for

the project

• National Association of Energy Service Companies– www.naesco.org– Site includes “finding a provider”, market analysis,

etc.– 2013 NAESCO 30th Annual Conference, Nov. 12-14

in Orlando, FL

http://www.naesco.org/


FEMP Info for technology vendors

• List of ESCOs that have competed and been awarded a master DOE ESPC contract

• List of ESCOs that have been screened by a qualifications review board of federal agencies

http://www1.eere.energy.gov/femp/financing/espcs_companies.html

• Guide on Selling Energy-Efficient Products to the Federal Government

– http://www1.eere.energy.gov/femp/pdfs/selling_eeproducts_to_gov.pdf

• Doing business with the federal government fact sheet

– http://www1.eere.energy.gov/femp/pdfs/doing_business_with_gov.pdf



http://www1.eere.energy.gov/femp/pdfs/selling_eeproducts_to_gov.pdf



http://www1.eere.energy.gov/femp/pdfs/doing_business_with_gov.pdf




Julia KelleyPhone: 865-574-1013

Email: [email protected]